LEGAL HOTLINE ARCHIVE
Anti-Trust Violations

Q. Is it a violation of anti-trust laws by publishing a code that details how much commission a property is listed for. For example a code of A would indicate a commission of 4%, a code of B would indicate a commission of 5%, and so on. This code indicates the entire commission that the property is listed for, not the amount that is offered to the selling broker.

A. Any form of cost or price disclosure can give rise to potential antitrust claims. One Court has stated:

Interseller price verification among real estate brokers consisting of information that identifies specific firms as selling at specific prices is not a per se violation of the Sherman Antitrust Act. Such information exchanges are also not necessarily per se legal either. Their legality depends on their effect upon competition.

See, Penne v. Greater Minneapolis Area Board of REALTORS, 604 F.2d 1143 (8th Cir. 1979).

Indeed, the circulation of commission rate information has been permitted by several courts in cases involving real estate boards and multiple listing services. See e.g. United States v. Realty Multi-List, Inc., 629 F.2d 1351 (5th Cir. 1980); Murphy v. Alpha Realty, Inc., 1978-2 Trade Cases P 62,388 (N.D.Ill.1978); Hill v. Art Rice Realty Co., 1974-2 Trade Cases P 75,364 (D.Ala.1974); U. S. v. Greater Pittsburgh Board of Realtors, 1973-1 Trade Cases P 74,454 (W.D.Pa.1973); U. S. v. Los Angeles Realty Board, 1973-1 Trade Cases P 74,366 (C.D.Cal.1973); U. S. v. Long Island Board of Realtors, Inc., 1972 Trade Cases P 74,068 (E.D.N.Y.1972).

Recognizing that injury to competition is an requisite element of any antitrust violation, the key is to support its claim that the multi-listing service increases economic efficiency and renders the market more competitive. For example, a multiple listing service, like MLS, may reduce market imperfections by serving as a central processing and distributing point for listings of real estate, MLS helps reduce information and communication barriers and ease the built-in geographical barrier confronting buyer and seller. Further, it aids the market in its function as price-setter for properties and financing. It aids the seller by allowing him to give an exclusive listing to a broker, and thus to choose the agent with whom he prefers to deal, while nevertheless enabling him to place his listing in the hands of all MLS' members to attempt to procure a buyer. The buyer benefits by gaining access to a wider selection of properties in a shorter time period than would be the case if he engaged a lone broker. The broker doubly benefits-- he gains a larger inventory to sell and gains broader exposure for his own listings. Finally, MLS' other services such as the furnishing of lock boxes and arbitration procedures-provide clear competitive benefits to all parties.

The antitrust laws do allow reasonably ancillary restraints necessary to accomplish beneficial pro-competitive objectives. And, the alleged "restraints" of the general types imposed by MLS should not be subject to out-of-hand condemnation.

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